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Show Me the Money: Broadcaster Auction Payments Coming in Next Few Days
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According to a newly-released Public Notice, the FCC has directed the U.S. Department of Treasury to pay all broadcasters who had winning bids in the recently concluded spectrum incentive auction. The only exceptions are those broadcasters that failed to submit sufficient banking information to the Commission for payment to be made. Since the FCC does not control the actual release of funds, it indicates it will deem the amounts as paid five business days from the release of yesterday’s Public Notice (ie, July 27). Any broadcaster expecting to be paid that is not listed in the attachment to the Public Notice will want to promptly fix any issues with its banking information so that it too can receive payment.

The Public Notice also establishes the deadline for each category of auction winner to go off-air after getting paid. For the fewer than a dozen stations actually terminating service and going permanently dark, yesterday’s announcement is a major milestone, establishing their last day of operation as October 25, 2017. These stations can actually cease operating as early as late August, but only if they start airing their required notices to viewers and sending their notices to MVPDs immediately. Those needing a longer goodbye can ask for additional time to remain on air as long as they can show the FCC good cause for continuing to operate beyond the deadline.

The approximately 30 stations that elected to move to a high or low VHF channel obviously do not face a “go dark” deadline. Instead, they will transition to their new channel much the same way as stations being involuntarily repacked. In other words, these stations will start operations on their new channels according to the FCC’s previously-announced transition phase assignments. They’ll just do so with lighter hearts and heavier pockets than repacked stations.

The majority of the stations listed in the Public Notice as being eligible for an auction payment indicated at the start of the auction (in their Form 177) that they had entered into or intended to enter into a channel sharing agreement for post-auction operation. These stations have until January 23, 2018 to cease operating on their current channel and commence operations on their shared channel. If a station’s “intention” to enter into a channel sharing agreement has not yet been realized, it will have until January 23, 2018 to get that done. In addition, the FCC is allowing channel sharing stations to request up to two 90-day extensions (until July 2018) if they need it.

The timing of yesterday’s announcement effectively means that auction winners whose channel sharing partner was assigned to a new channel as part of the repack will have to transition twice—once to their sharing partner’s pre-transition channel, and a second time to their partner’s repacked channel. Since the first transition phase testing period does not begin until September 14, 2018, even a channel sharee obtaining both 90-day extension periods would have to get special dispensation from the FCC or go dark for some period of time if it wants to avoid having to do a two-step transition.

While bidding in the first-ever broadcast incentive auction has been over for months now, today’s Public Notice is a major step in finally closing the book on that auction. The U.S. Treasury will be sending auction payments out over the next few days, and once that is done, all eyes will be on the repack itself. Given last week’s implosion of the FCC’s filing system under the strain of the initial round of repack construction permit applications and reimbursement claims, the repack promises to be a challenging endeavor for both broadcasters and the FCC. However, for those broadcasters whose pockets are flush with auction payments, the repack might seem just a little less burdensome.

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